Global Ideas

Emerging Market Equities vs SPX

Emerging Market equities have outperformed the S&P 500 (SPX, quote) 12 of the last 16 days and now have taken this spread back to resistance levels at the 100mda avg where they paused yesterday.

The primary drivers for the best move since August last year are:

Oversold conditions on fund flows and sentiment

Fed clarity on rates

A few key emerging markets experiencing political support for their markets in the form of either negative popularity trends which might augur change, or actual reform agenda that has entered into the economic outlook.

As of yesterdays close Emerging Market equities have recovered all losses YTD and make the move in February look like a distant memory.